Bandwidth CEO David Morken sells $214,301 in stock

Published 05/03/2025, 01:40
Bandwidth CEO David Morken sells $214,301 in stock

David A. Morken, Chairman and CEO of Bandwidth Inc. (NASDAQ:BAND), a $432 million market cap communications technology company, recently sold shares worth approximately $214,301. The transaction, which took place on March 3, 2025, involved the sale of 13,653 shares of Class A Common Stock at a weighted average price of $15.6963 per share. The stock, which InvestingPro analysis suggests is currently undervalued, has declined about 17% over the past year despite strong revenue growth of 25%. The shares were sold to cover tax obligations associated with the vesting of Restricted Stock Units (RSUs) on February 28, 2025.

In addition to the sale, Morken acquired 42,309 shares through the vesting of RSUs on February 28, 2025. These shares were acquired at no cost, as part of the company’s equity compensation program. Following these transactions, Morken holds a total of 142,439 shares directly.

The sales and acquisitions were part of a pre-established trading plan under Rule 10b5-1, which Morken adopted in March 2023 to manage tax liabilities linked to his equity compensation. While the company is not currently profitable, analysts tracked by InvestingPro expect profitability to return this year.

In other recent news, Bandwidth Inc. reported its fourth-quarter 2024 earnings with a non-GAAP EPS of $0.37, slightly missing the anticipated $0.39. However, the company exceeded revenue expectations with $210 million, surpassing the forecast of $204 million and marking a 27% year-over-year increase. The Cloud Communications segment contributed $144 million to the revenue, showing a 15% increase from the previous year. Despite these positive financial indicators, the company’s first-quarter revenue guidance of $168-170 million fell short of the $182.7 million analyst expectations. For the full year 2025, Bandwidth projected revenue of $740-760 million, below the consensus estimate of $761.5 million. The company’s strong adjusted EBITDA of $23 million and a robust free cash flow of $30 million were notable highlights. Citizens JMP analysts maintained their Market Outperform rating on Bandwidth with a price target of $36, despite the earnings per share falling short of expectations. Additionally, Bandwidth reported a record non-GAAP gross margin of 58% for Q4, up from 55% a year ago. CFO Daryl Raiford mentioned an expected "normalized revenue growth" of 8-11% in 2025, accounting for a predicted cyclical reduction in political campaign messaging activity.

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